The market crash rocked and shocked the investment world. In a frenzy, last week the social volume of Bitcoin broke the record high in the 2017-18 bull run. The increasing mentions of Bitcoin on social media indicated a spike in interest which can be then translated into acceptance and adoption. However, as expected, the social volume of Bitcoin dropped to normal levels after the peak.
The community chatter indicates a bearish bias in the market for Bitcoin – which may not be such a bad thing. Historical trends suggest that it is a highly bullish sentiment with high price levels that result in an increased consolidation period for cryptocurrencies. Thus, the price of Bitcoin and other cryptocurrencies may be expected to gradually recover over the course of the next few days.
The social data from the sentiment analytics’ platform suggest that Bitcoin may be in undervalued conditions. A price recovery may be seen soon. In the derivatives market, the funding rate – fee paid for perpetual contracts – have hovered either neutral or negative. A negative funding rate means Bitcoin short traders are paying Bitcoin long traders – a bearish bias. The negative funding rate has also coincided with Bitcoin’s price recovery in the past.
However, there are factors hindering the price recovery of Bitcoin as well. Bitcoin’s Daily Active Addresses (DAA) have stayed above 1 million for a while with the level becoming an unofficial threshold. Bitcoin’s Daily Active Addresses have stayed below the threshold level in the lower half of May.
After a short-lived upward stint of Bitcoin, the movements of BTC whales have also disappeared. Since the ATH of Bitcoin, the holdings of 100-10k BTTC addresses have fallen drastically by nearly $4.14 billion. Moreover, Bitcoin moving to exchanges have also declined slightly.